The rate could maintain its growth in the short term. However, note, that the currency pair is pressured by the 100-hour SMA at 1.2703.
The British Pound depreciated against the US Dollar, following the UK Monetary Policy Summary and Official Bank Rate data releases on Thursday at 11:00 GMT. The GBP/CAD exchange currency rate lost 29 pips or 0.23% right after the release. The British Pound continued trading at the 1.2690 level against the Greenback.
The Bank of England released the UK Monetary Policy Summary data, where the UK policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Official Bank Rate unchanged. Note, that MPC Official Bank Rate Votes data was published at the same time.
According to the official release: "The Committee continues to judge that, were the economy to develop broadly in line with its May Inflation Report projections that included an assumption of a smooth Brexit, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon. The MPC judges at this meeting that the existing stance of monetary policy is appropriate."
UK Current Account
Today, the UK will have data, as the UK Current Account will be announced at 08:30 GMT. This event has caused moves from 11.5 pips to 44.3 since March of 2018.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate traded sideways, trying to surpass the support level formed by the weekly PP and the 200-hour SMA at 1.2669.If the given support level holds, it is expected, that the rate could reverse north. However, note, that the currency pair would have to surpass the resistance formed by the 55– and 100-hour SMAs, currently located at 1.2684 and 1.2705 respectively.
If the given support level does not hold, it is likely, that bears could prevail in the market, and the pair could decline to the psychological level located at the 1.2640 mark.
Hourly Chart
On the daily candle chart one can observe that the recent surge has been consistent with the long-term descending channel pattern.
In addition, on the daily chart the rate can no longer be considered oversold, as the 55-day simple moving average had closed in on the rate and approached the weekly R1 at 1.2830 strengthening its resistance.
Daily chart
On June 21, 70% of open position volume was in long positions at the Swiss Foreign Exchange.
On Monday, 68% of volume was in long positions. On Tuesday, the sentiment was 65% long, and by the middle of Wednesday 64%.
The trend of closing long positions continued on Thursday, as 62% of GDP/USD position volume was in long positions.
However, on Friday, 64% of open position volume was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish, as 72% of orders were set to sell.
Due to that reason it was assumed on Friday that the selling trend could prevail.